Skip to main content

tv   FOX Business After the Bell  FOX Business  January 14, 2013 4:00pm-5:00pm EST

4:00 pm
the new york stock exchange. the tech is really the index that's moving the market today with apple first drawing it down and then dell drawing it back up again. nicole: listen we have had a lot of action. dell of course we have had it halted today when it was up 10%. the talk about maybe them going private, a buyout, sent dell soaring. apple you talked about the orders, they have cut down on the orders. that sends apple below $500 to 498 and change. cisco systems gets upgrades. ibm gets downgrades. and hewlett-packard steals the show on the dow jones industrials. so i think you are right on by saying that tech certainly stole the show today. sandra: and also in another positive note today, rimm shares seeing big gains, maybe taking advantage of apple's big decline below 500 today? nicole: right. you know, we left rimm out. that's a great one. also all the app developers, 15,000 app submissions over the weekend trying to get in on the new blackberry 10. we saw research in motion
4:01 pm
jumping today big-time, up about 10%. [closing bell ringing] david: we didn't have a chance to talk about netflix, but that's up again, triple digits today as we can hear the bells are ringing on wall street. look at the indexes, looks kind of flat, but individual stocks, that was the name of the game, whether we're talking about dell, whether we're talking about apple, we have both of those covered by the way with expert analysis on dell and apple. the dow jones industrial managing to squeak out a gain today. nasdaq though if you look at nasdaq, of course s&p was down just a tick, but you look at nasdaq, now it is down. it's down about a quarter of a percentage point, but it was down a lot more than that when it was just apple that was moving that index down. as soon as news came about dell, that was about 1:00 or 2:00 p.m. today. that's when we saw nasdaq come back up again, not enough to bring it into the green but enough to change it around quite a bit from where it was. sandra: looking at the markets you would think it was a flat day but some big movers involving apple's big drop
4:02 pm
today. let's take a look at some apple's suppliers. so on apple's big decline, you have to think about all those suppliers, david, that are affected by that. david: that's really what moves the apple markets so much. let's talk about commodities for a second. platinum was a big mover in the pits today. rallying $27 hitting three month highs. silver also seeing a nice pop up 2.3%. it did settle above $31 an ounce. fed chief ben bernanke he's at the university of michigan taking questions this hour. we are keeping a close eye on an event. this is an event that really could move markets tomorrow. set the whole futures up. and we're going to update you throughout the hour on anything he says that could affect your investments. sandra: plus big news in the tech world. we have got reports that dell is in talks to go private, and that's sending shares way up today, up more than 12 bucks.
4:03 pm
the iphone keeps losing market share and iphone part manufacturers they are losing orders. is it time for tim cook to lose his job? we've got an analyst who covers both of those companies, david coming up. david: also toyota driving past gm taking the title for the world's top selling automaker. we will go live to the detroit auto show to hear from toyota u.s. president about what new cars are hitting the road. wait till you see the new mercedes by the way. but first we will tell you what drove the markets today with today's data down load. stocks struggling for direction today. the dow crossing the unchanged line 36 different times before holding firmly in the green. the dow posting gains for the fourth trading in a row while the nasdaq and the s&p ended lower. industrials and consumers staples were today's top performing s&p sectors while telecom and technology did lag. corn and soybeans soaring on demand and supply worries today. soybeans hit the highest level in more than four months while corn climbed to a one month high on signs that u.s. supplies are
4:04 pm
tightening amid higher demand from buyers overseas. so look for price hikes at the grocery store. also the euro hitting an 11 month high against the dollar, a possibility of an interest rate cut in europe fades. euro hit an intraday high of $1.34, jumping 2.5% against the greenback. sandy? sandra: we're also watching dell shares. this is the big story. especially after trading we're still going to continue to watch this stock. the stock soaring today, reports surfacing that it is in talks with private equity firms over a potential buyout. david: joining us now is williams financial group director and research in equity capital markets is joining us by phone. first of all, is it going private and if so, how much >> you know, david i can't say if it's going to go private or not. we definitely get some specifics at least in some private equity being named, but whoever leaked something like this, if it is true, just cost somebody a little over 2 billion dollars
4:05 pm
today, so if it was going to go private, it could have done so much cheaper. sandra: i want to focus on the fact that the stock has taken a major hit over the past year, the past six months, it's up 28%, it has rebounded quite a bit from its lows last year. over the past year, however, it's lost about a quarter of its value. i guess my question at this point, by the way, the company is saying that it won't comment on rumors or speculation at this point. would this be a good move? michael dell owns about 15 -- 15% of the outstanding shares of the company. what does it look like overall for the company right now? >> it might make sense because you have had a frustrating year with dell. this was an $18 stock just earlier -- about february of last year. it's been something that once you get this kind of a pullback, you start to look at options like this. and does it make sense if i eve -- if i have got 15 or 16 percent of the stock, maybe i could do more with that equity position if i were private and
4:06 pm
didn't have to have the hassles and the short-term focus of daily trading? david: cody, let's talk about the cash that dell has. i was looking a 2010 piece, back then they had about 12 billion dollars in cash. right now that's been cut half. they have about 5 billion in cash. how much of that cash is overseas? we all know that when you have money parked overseas, as apple does, 100 billion dollars or so, you wonder whether or not it's had a tax hit yet, if it's overseas, it hasn't. how much of the 5 billion that dell has is overseas? >> you know, that's a good question. i don't have that number off the top of my head but with these tech companies selling so much globally you do end up getting a large stockpile overseas. david: let me stop you there so our viewers know. that means there could be a potential big tax hit if most of that money is overseas? >> yeah, that's exactly right. if you have to repatriate for use in something like this, then you have to pay the differential in the different tax jurisdictions. so while you have 5 on the
4:07 pm
books, it could be significantly less that you could actually utilize. sandra: i want to bring a report from goldman sachs. they upgraded based on quote the possibility of a leveraged buyout offer providing floor for the shares. if you own dell shares, if you want to own dell shares, what does one do right now based on the news that we have at this moment? >> well, i think outside of a takeout, the 2013 still looks better for dell than 2012. they're doing a lot of things to get them out of just the commodity pc market, into services, into servers into the upper enterprise where margins are better to look more like an ibm than maybe just a pc seller. that will be better for the company as we push through the next few quarters. i think we have a little bit better pc backdrop to boot. david: cody you know this company extremely well, better than most people. it is run by michael dell, the owner -- or the previous owner, the entrepreneur, he has his
4:08 pm
entrepreneurial mindset, it is embedded in his dna, do you think that he felt hamstrung by the capital markets and really wants to go private? >> i think you have to especially when you are talking about a company that really needed to turn itself around and it is so hard to turn yourself around and think long-term when you're doing this treadmill of quarterly earnings and worried about that, rather than the strategy, the structure of the firm, so much easier to maneuver if you're a private company. david: cody from williams financial, a guy who has been following the story, the stock for a long time. very privileged to have him here today. cody, thanks a lot. appreciate it. >> thanks guys. sandra: let's get to today's markets. we have ira epstein in the pits in chicago. we also have chris middleman of middleman brothers. also hank smith chief investment officer at a trust company. let's start first with ira
4:09 pm
epstein. i want to go down to you because we did have the president speaking today making a case for the debt ceiling, but didn't really mention anything that it had to do with up coming spending in 2013. i imagine that was a bit of a point of contention for traders down there today. >> you know, what it really is is we see the story before -- we've seen the story before, now act one of a brand new debt ceiling game. the president didn't wait for the inauguration. he came out and of course what he's going to say is his past bills released the money, that's what should be done. he didn't answer a question in the press conference as to whether or not he has authority to just order that money released which was interesting. but the republicans, they told you on the revenue part of this bill what they were going to do is use the debt ceiling along with the sequester funds to try to reach a compromise where there's more spending. where there's more cuts in spending is what i'm trying to say. so what i thought today was a shot across the bow, i was very
4:10 pm
surprised the republicans didn't hold another conference to immediately repudiate it, but this is what we're going to see for the next 7 or 8 weeks, and you can only fool the public some of the time. i think we're all agreeing there's going to be spending cuts. the debt ceiling is going to be made. america is not at the end of the day going to --. on the other hand, they are not going to solve this quickly. they will make us go through the same thing they did at the end of 2012. david: we're always hearing that the president is not going to make a deal until he does make a deal and the same is true with congress but something is going to get done. let's focus on stocks for a second. we had this two very interesting bits of news from the tech market. apple waking up to news today that they are not selling as many iphone 5s as they thought they would therefore they are cutting back on supply orders. also the news from dell that they may be going private. is there a retrenchment -- retrenchment going on in the tech sector >> being a commodity person all my life, a commodity is a
4:11 pm
commodity and over time it loses value. dell has discovered that. that is one of the problems they are in. they have to get into a different business. apple came out with its iphone 5 which didn't shake the world. i have an iphone 4-s. why do i need an iphone 5? give me a reason to go to the new phone. on top of that, you have the android which has more manufacturers releasing numbers. it's no surprise that they are going to have the bigger market share, but what apple needs to do and they haven't done it is strike with a hot iron and give us a new product, something that makes you buy that iphone 5. sandra: ira epstein on the floor in chicago. thank you. david: let's bring in the market panel, chris middleman and hank smith. chris, let's go first to you. let's start with apple, because the question whether it's lost its luster as sort of a -- a lot of people six months ago were talking about it as a commodity, as a stock that just couldn't lose. has it lost that sort of image? >> i think apple is a great company, generates a lot of free
4:12 pm
cash flow, amazing balance sheet. we don't own the stock. we actually have never owned the stock, unfortunately. but it's a great business. if someone wanted to buy apple here, i wouldn't have a problem with it. david: would you recommend it? >> the only reason i wouldn't recommend it is because we have other alternatives we like better. you know, i do remember sony in the 80s being looked at as the dominant provider of this type of thing and that didn't last forever. i'm a little bit concerned about their ability to continue to dominate in the way they have with samsung and these other companies at their heels now. sandra: hank you are pretty much positive on equities across the board which means i can assume that you probably like technology. with all this news on apple's decline and dell's big pop today on all the speculation, where do you fall in the tech sector? >> well, look, first of all, we prefer companies that pay a dividend, so apple falls right into that. dell does not. we do own apple. we purchased apple shortly after
4:13 pm
they initiated their first dividend. and we like apple both for the intermediate and long-term and believe the story is intact. this is a secular growth area, talking about smart phones and tablets and apple is going to be a major part of this growing pie. sure, they have competition. but the best part about apple is compared to tech, let's say, in the late 90s is there's no valuation headwind. valuation at 10 times earnings, there abouts, even maybe a little bit less, is not a headwind to this stock. so we think you can comfortably use dips to add to positions and that's what we're going to be looking to do. david: today is certainly one of those dips. we will be talking a lot more with an analyst about apple coming up later in the show. chris let's go to specific picks. i rented an avis car this weekend. i rented a zip car last week and now they are both in the same company.
4:14 pm
it had a big pop today. you think it's an exciting company? >> yes, we have been involved in avis budget group for a number of years now. the stock is doing very well of late. i think the stock is just every 21 now. we think it is worth around $30 a share. that would be about 10 times free cash flow. it is not aggressive target price. the company generates about 360 million of free cash flow. ten times that gets to $30. sandra: hank, there's one area and we only have time for one more question there's one area you don't like and that's utilities. >> yes, they do have yields but not as attractive as they were a year ago. the big thing there is valuation. the electric utilities are selling 18 to 20 times earnings for a 4, 4 1/2 percent yield. that is not a good combination for investors. david: by the way hank thinks the market is going to do as well this year as it did in 2012. that means another 15% jump. i'm looking forward to that. hope you guys are right. chris middleton, hank smith, thanks gentlemen.
4:15 pm
>> thank you. sandra: fed chief bernanke is about to answer questions at the university of michigan. we will let you know what he's saying about our economy and the future fed action. as we know that can be market moving. this event could move the markets tomorrow. david: that's a live picture coming out of michigan. we will be going right back there. also the news of apple cutting down orders for iphone parts is driving the stock way down again today. we have an apple analyst who cut his price target by 150 bucks back in december. does he think it's also time for the company to cut their ceo tim cook? sandra: shares of dell soaring on talk of a buyout. more on both tech stories coming up. keep it right here. ♪
4:16 pm
♪ [ male announcer ] this is karen anjeremiah. they don't know it yet, but they' gonna fall in love, get married, have a couple of kids, [ children laughing ] move to the country, and live a long, happy life together where they almost never fight about money. [ dog barks ] because right after they get married, they'll find some retirement people who are paid on salary, not commission. they'll get straightforrd guidance and be able to focus on other things, like each other, which isn't rocket science. it's just common sense. from td ameritrade.
4:17 pm
[ male announcer ] how do you make 70,000 trades a second... ♪ reach one customer at a time? ♪ or help doctors turn billions of bytes of shared information... ♪ into a fifth anniversary of remission? ♪ whatever your business challenge, dell has the technology and services to help you solve it.
4:18 pm
david: shares of premium channel stars soaring.
4:19 pm
to nicole. nicole: it was under the umbrella with liberty. they did have their nasdaq debut for stars. shares jumped almost 10% today. and it was spun off from liberty media and liberty media in the meantime wants cash to maybe take over other things such as sirius xm? we will see. when you think of starz, you think the premium channel, encore, they boast about 55 million subscribers and some analysts say it is a target for a takeover itself, but in the meantime it is debuting on its own, starz, it had a great day on wall street. back to you. david: thank you nicole. sandra: you know that when federal reserve chairman bernanke speaks, the markets listen. well he is speaking right now. the markets happen to be closed. he's speaking at the university of michigan. and it could be a big mover tomorrow. david: it could indeed. this could affect the futures markets. we will kind of watch the futures as he talks. fox business's peter barnes is listening in.
4:20 pm
peter, you are going to tell us if he says anything that could move the markets. peter: that's right david and sandra. the remarks just getting underway here. they got started a little bit late. and the first question out of the box here from the dean of the ford school of public policy at the university, susan collins, her first question on the fiscal cliff. so now big headlines there yet from the fed chairman. but we are awaiting for potential comments on monetary policy, specifically professor collins told the washington post that she does plan to ask chairman bernanke about the news that came out of the fed minutes a couple of weeks ago that there's this internal debate among fomc members on whether or not to start pulling back quantitative easing, to start cutting back on all those trillions of dollars in bond purchases we have seen over the last few years. sometime this year, which was a little bit unexpected, to the financial markets. and there are now it appears a majority of members who might want to do that either earlier this year or by the end of the
4:21 pm
year. so that will be the -- those will be the headlines we will be looking for. david and sandra? sandra: thank you peter barnes. when you have anything, just jump in, we will take you live. we will break that for our viewers. david: thanks peter. reports are out apple is cancelling many orders for iphone parts as it loses market share and stock as a result taking a big hit. what is being done to energize the consumer? is it time for tim cook to go? a lot of questions about apple. we're going to be asking the analysts. sandra: toyota overtaking gm as the world's top selling automaker. so what new cars are hitting the road to keep it in that position up next? toyota u.s. president will be joining us. he will be joining us with jeff flock live from the big auto show in detroit. ♪
4:22 pm
what are you doing?
4:23 pm
nothing. are you stealing our daughter's school supplies and taking them to work? no, i was just looking for my stapler and my... this thing. i save money by using fedex ground and buy my own supplies. that's a great idea. i'm going to go... we got clients in today. [ male announcer ] save on ground shipping at fedex office.
4:24 pm
4:25 pm
david: toyota regaining its title of world top selling automaker for 2012. it increased its global sales by 22% year over year in 12, selling 9.7 million vehicles. fox business's jeff flock joins us for the detroit auto show with toyota's usa ceo. >> i'm going to suggest to you that you're really taking the
4:26 pm
gloves off this year, and i'm going to say that because look at this exhibit. this is the biggest exhibit you have ever had detroit. i want to say in past years you have sort of kept a low profile on detroit. this is a big domestic, you know, automaker town, this is a new toyota. >> well, it's 35,000 square feet. it is the biggest we have ever had. but part of it is we've got such a huge line up of product now. and all this exciting new product that we just need to be able to display it for all of you as well as our customers to come see. jeff: okay. on that point, take a look at this, because sometimes you've been criticized -- you make these cars that everybody buys. they run, they go. they are great. but somebody says, you know, let's update it a little bit. what's this? >> this is updated. this is the concept corolla. it is a styling execution of the direction of the next generation of corolla. so as you know, corolla's the most popular car in the world.
4:27 pm
it is known for its quality, dependability, reliability and value, but not necessarily for its design. this car changes all of that. jeff: why have you chosen to do this? i mean you are already the most popular car in the world. if it's orange, does it run worse or something -- >> no, it runs much better. but the big difference is, we know that quality dependability reliability has always been important to consumers. it still is today. but emotion is much more important than it's ever been in the past. so exterior styling, interior styling, fun to drive, connectbility is now equally important to our customers. so that's why you see cars like this, cars like avalon, cars like rav-4 coming out because that's what our consumers demand. jeff: i have to show you the unveil here. guys, if you haven't run it yet, can we run that tape of this unveiling? you know, you've always had low profile unveilings. you know, in the past, guys have crashed through walls and, you know, all sorts of things, they
4:28 pm
had cows in the street one year in a truck unveil, you have never done that. this year, this is a -- there are monitors that actually display video and then go transparent. i don't know how that works. >> nor do i. that's part of the emotion. that's part of the excitement. it is no longer just, you know, taking the curtain off a product. we have to be more exciting. more stimulating for all the journalists, but also for our customers to get excited about the products. it is today's business. jeff: journalists do have a short attention span. i will give you that. >> never. jeff: jim, i appreciate it. this is a great looking car. it is a toyota. no offense to the folks at toyota, but as jim said, harken to our folks -- friends at gm it is not your father's buick and not your grand father's toyota either. david: i like that color.
4:29 pm
jeff: it is everybody's car, the most popular car in the world. what can i say? sandra: thank you very much jeff. it was enlightening to say the least. from cars to boats, later this hour, we will show you the big attraction that has the crowd buzzing at the denver boat show. david: also reports that apple is cutting down on iphone production? maybe consumers need something new, really new, not just small updates to existing products. is it time -- talking about something new -- for this man, tim cook, the ceo to leave apple? i will be asking the analyst coming up next. ♪
4:30 pm
. . . .
4:31 pm
4:32 pm
david: really shocking news about apple today leading to a big drop in share pies. the "wall street journal" reporting the cancellation of half of apple's orders for the iphone 5 screens because of shrinking demand oh all. other supplies are also being cut. calling into serious question exactly how much market share the company has been losing recently. with no steve jobs like product break throughs talked about and product foul-ups and share price plummeting, some are wondering whether it is time to replace ceo tim cook before the company implodes any further.
4:33 pm
let's talk about this. we have a mizuho senior equities research analyst. thank you for coming in. i appreciate it. let see summarize if i can, some warnings i heard from stockholders are really worleyed about the share price here. they say apple is becoming a follower, instead of a leader. that they're playing to the cheaper competitors. that is why they came out with the mini ipad that didn't really work well. that is why they're thinking of coming with a cheaper iphone, sort of following what's out there in the market instead of leading the market and that means there is a problem with leadership inside the company which is why tim cook should go. are you hearing any of this? >> no, we don't agree with any of that. the thing is, yes, they led the way in renting smartphone market the way it is today. they led the ipad and tablet computing market. they focused on high-end
4:34 pm
market. the high end is slowing down and there is a lot of growth happening in the mid-tier of the market. the tablet size, we zemin any succeed. on the phone side, yes there is talk about cheaper iphone and that is something they have not announced. they have not really said anything about it. there has been chatter in the supply chain something could be in the works. we'll see what happens. there could be a reason for them to get in the cheaper iphone market. all-in they have shown product leadership. it just that the market at high-end moved so fast, so quickly and growth rates there are closing and mid-tier is where there is growth. >> the competition is new now. you have this new thing, a new operating system, beyond an droid that is going to compete with them. the thing about apple during steve jobs's lifetime was that all the components were there for other products to use the same. it is the way apple put them together that was brand new.
4:35 pm
when steve jobs walked out there with a new product, whether it was the ipod or the iphone or the ipad, you knew it was a breakaway look at something that may have existed before but the no the way apple was coming out with it. it seems to have lost that premiership that it used to have. >> it is something, i think your point is valid. think what the new management team post-steve jobs needs to do, they need to prove they can create a brand new product, create a product and take it to the next level and that is something they haven't proven yet after steve jobs. david: how long do you give tim cook to prove isn't with the share value dropping as quickly and dramatically as it has from 700 to below 500 early today, isn't it time to look for a new leader? >> i don't think it is time to look for a new leader yet. i think we still need to give them time to, keep in mind, the tech product life cycle is time it takes to develop a new product goes
4:36 pm
more than two to three years. so, after steve jobs we need to give them some time to deliver on that, but at the same time, i think you're right, they need to keep proving they can go on to take market share which is something they have to prove to us. david: do you hope, do you hear about a new product, a new steve-like, steve jobs-like breakthrough product that's in the works? i keep hearing about apple tv. so far we haven't seen it. is there something? because they better come out with something soon, otherwise we could see share value at 400 or even 300 and below. >> listen, i agree with you that they need to show new products and the company needs to show new products. keep in mind they have a very strong balance sheet. david: that's true. >> they can do that on the share buyback side to support the stock. they have the largest cash balance in the world. they have a lot of room they have. they have a lot of levels they can play with. i don't deny the fact they need to come up with new products. to convince investors for
4:37 pm
the stock to move materially higher. david: speaking by the way as shareholder myself, i would rather see them put the money in new products than buying shares back to hold up the value of the stock. i have to ask you a little bit about dell because you also look at dell. what do you think about the move? will it become a private company again and will it thrive as a private company if that happens? >> speculation comes on and off all the time. every few months a couple of times a year we hear dell is considering going private. then they say no, we're not doing it. i don't know know where things are currently. clearly there is a lot of news and speculation in the media. but, one thing to keep in mind, mathematically if either transaction can work, they can make it work based on strong cash flows, strong free cash flows and cheap financing options. but strategically it will make transition even harder. right now they can buy a couple billion dollars, spend a couple billion
4:38 pm
dollars of on a software acquisition. if the company is fully levered they will not have cash flow needed to make the strategic acquisitions to drum up the business. strategically they lose out on that. we think a this is less likely but there is enough to move the smoke. >> enough to move it 13%. thanks for coming in. sandy, over to you. sandra: david, a big week for bank earnings. we'll hear from goldman sachs, jpmorgan, just to name a few. plus some much those regional banks up next. we've got an analyst ready to tell you who is going to beat and who will miss. he is naming names. you can ask before they report. fed chief person bern taking questions right now as we speak at the university of michigan. our cameras are rolling and peter barnes is monitoring. we'll bring you any important comments that affect you and your money. keep it right here. we've got it covered.
4:39 pm
♪ . at a dry cleaner, we replaced people with a machine. what? customers didn't like it. so why do banks do it? hello? hello?! if your bank doesn't let you talk to a real person 24/7, you need an ally. hello? ally bank. your money needs an ally.
4:40 pm
omnipotent of opportunity. you know how to mix business... with business. and from national. because only national lets you choose any car in the aisle. and go. you can even take a full-size or above. and still pay the mid-size price. i could get used to this. [ male announcer ] yes, you could business pro. yes, you could. go national. go like a pro. at legalzoom, we've created a better place to handle your legal needs. maybe you have questions about incorporating a business you'd like to start. or questions about protecting your family with a will or living trust. and you'd like to find the right attorney to help guide you along, answer any questions and offer advice. with an "a" rating from the better business bureau legalzoom helps you get personalized and affordable legal protection. in most states, a legal plan attorney is available with every personalized document to answer any questions.
4:41 pm
get started at today. and now you're protected. >> i'm adam shapiro with your fox business brief. jpmorgan chase has been served with two formal enforcement actions from the office of the comptroller of the currency and federal reserve. the occ is ordering the banking giant to improve its risk management procedures following more than $6 billion trading loss it incurred last year. jpmorgan also has to improve its systems for anti-money laundering procedures. phone prices posted the biggest annual increase last year. that is the biggest since 2006. according to real estate data provider corelogic, prices climbed 7 1/2%, thanks to stronger demand, lower inventory of bank owned properties. they predict prices will rise 6% nationally this year. stocks struggled to stay in positive territory.
4:42 pm
the dow managed to end in the green for the fourth straight trading session. that's the latest from the fox business network, giving you the power to prosper and you wouldn't have it any other way. but your erectile dysfunction - you know, that could be a question of blood flow. cialis tadalafil for daily use helps you be ready anytime the moment's right. you can be more confident in your ability to be ready. and the same cialis is the only daily ed tablet approved to treat ed and symptoms of bph, like needing to go frequently or urgently. tell your doctor about all your medical conditions and medications, and ask if your heart is healthy enough for sexual activity. do not take cialis if you take nitrates for chest pain, as this may cause an unsafe drop in blood pressure. do not drink alcohol in excess with cialis. side effects may include headache, upset stomach, delayed backache or muscle ache. to avoid long-term injury, seek immediate medical help for an erection lasting more than four hours. if you have any sudden decrease or loss in hearing or vision, or if you have any allergic reactions such as rash, hives, swelling of the lips, tongue or throat, or difficulty breathing or swallowing, stop taking cialis and get medical help right away.
4:43 pm
ask your doctor about cialis for daily use and a 30-tablet free trial. sandra: shares of wells fargo falling after reporting fourth quarter earnings on friday. with a slew of banks scheduled to roll out result this is week how will financials fare this earnings season? fred cannon, director of research at kbw, he joins us route know. thanks for joining us. i want to speak broadly first and talk about your picks because of time here. broadly speaking, the financials, very strong in 2012, outperforms the broader stock market, up more than 25%. where do you fall on the financials heading into the big reporting season this week? >> well after being up more than 25% last year and having a pretty good year annualized this year i think you have to be cautious. wells taught us that. people are excited with the recovery, home prices are going up, it is not coming
4:44 pm
through with the core earnings in the banks. because the interest rate environment is very tough for them. you want to be cautious going into earnings. sandra: i told everybody you would be naming names. stock your portfolios with what you suggest here. you're calling for three of the 11 regional names to beat expectations. which three? >> well that would be mtb u.s. bank and fifth third and we think they are all in a position because of their mix of earnings, a lot of fee income because of merger in the case of mtb. those are ones where you could see them buck this trend of overall pressure on earnings. we think those are the places to be and they're high quality names. sandra: i want to tell everybody, m & t reporting this week on wednesday, fifth third is reporting on thursday. those are where you're calling for beats. six of them you are predicting of regional banks will miss expectations which six? >> we have a number of them. in fact it will be more than six. it will be across the board. we look at a keycorp and pnc,
4:45 pm
some of the other names where the net interest margin pressure because of a flat curve, much like wells fargo, even if they make the number stocks could trade off. folks like wells fargo with looking at net interest margin and as much as the number. sandra: to clarify, net interest margin gives us gauge of future profitability from the firm, correct. >> absolutely. that is spread on loans and what you pay for profits. as that comes down your future profitability goes down with it. sandra: a couple you expect to meet expectations which are those? >> we have a number that will beat it will be the issue of net interest margin but for bigger ones, we look at bank of america. we look at jpmorgan who could beat. we think also have investors look at goldman sachs going into the quarter. we think they could have a big beat based on noninterest income that could get people excited about that name. sandra: bank of america i want to remind everybody is reporting this week as well. that is a big one to watch. goldman sachs among them.
4:46 pm
so this will be a hot week for the financials and many say this will be a very telling week for the rest of the year. fred cannon, thank you very much for joining us on the financials right now. this will be a week to watch. >> that thank you, sandra. >> sandy this is hot week for the debt ceiling limit debate. we have breaking news from rich edson joining us live from d.c. go ahead, rich. >> a new debt ceiling target date from treasury, mid-february to early march says treasury. remember we technically hit the debt ceiling on new year's eve but treasury is undergoing what are known as extraordinary measures to keep paying the bills. this in a letter to speaker john boehner from the treasury department. treasury currently expects to exhaust these extraordinary measures between mid-february and early march of this year. any estimate however will be subject to a significant amount of uncertainty because we are entering the tax filing season. a warning to republicans saying threaten to undermind our credit worthiness is no less irresponsible than threatening to undermined the rule of law and no more
4:47 pm
legitimate than any other common demand for ransom. very similar to the tone and warning about i president obama earlier today in a news conference saying that the congress has ordered him to spend this money and therefore must raise the debt ceiling with no strings attach the. republicans say the president signing spending into law and more cases wanted more spending and it is irresponsible not to raise the debt ceiling but john boehner speaking in a statement, it is real the failure to address our spending problem. back to you. david: demand for ransom. we're using kidnapping terms inside the beltway. there is no limit to this thing. we heard weaker estimates for economic growth and a few members want to see qe winding down soon. are we getting any hints from fed chief ben bernanke? you're looking at a live picture. he is speaking now in michigan. he is taking questions from students, from members of the press. find out what he is saying next. sandra: president obama also taking questions today, telling the press that raising the debt ceiling does not authorize more
4:48 pm
spending. it allows america to pay for the bills it already racked up but what is being done not to rack up more big bills? we'll head to washington for the latest. ♪ . ♪
4:49 pm
[ male announcer ] how do you turn an entrepreneur's dream... ♪ into a scooter that talks to the cloud? ♪ or turn 30-million artifacts... ♪ into a high-tech masterpiece?
4:50 pm
♪ whatever your business challenge, dell has the technology and services to hellvyou so.e it.
4:51 pm
4:52 pm
sandra: moments ago we heard from federal reserve chairman ben bernanke from the university of michigan. >> he is in ann arbor. has he given us any new insight on how much more money the fed will print up in order to buy more debt? joining us is fox business's peter barnes. peter, any indications? >> david and sandra, the fed chairman is indicating he wants to keep all this stimulus going. he wants to keep up quantitative easing, the latest round, three or four, depending how you're counting. he hasn't specifically addressed yet this apparent dissent within the federal open market committee. the fed policy setting body,
4:53 pm
on among, appears a majority of members who want to start cutting back all this qe before the end of this year, all this bond buying. the billions and billions of dollars per month but, take a listen to what the fed chairman said about continuing to keep up this kind of stimulus. >> there are some positives but i want to be clear that while we've made some progress that it's still quite a ways to go before where we would be satisfied. >> and we have heard of course from the fomc that it wants to keep up this stimulus until unemployment gets down to at least 6.5%. it is at 7.8 now. we heard the fed chairman weigh in on the battle in congress over the budget and fiscal cliff and additional spending cuts. he said congress should do their job and the fed will do its job in trying to continue to help the economy
4:54 pm
grow and help get the unemployment rate down. so the fed chairman continuing to try to put pressure on politicians to act. david and sandra. david: you know, peter, i'm just wondering since he came forth with this sort of benchmark saying if it goes to 6.5% and we'll stop, what if unemployment stays at 7%, will this money printing continue ad infinitum if unemployment stays at that level? >> he is saying this should not be a hard and fast rule about what the fed policy will be continuing going forward. it should just be kind of a guidepost. they will look at other economic indicators as well but, you're right, what if it does stay at 7%? does this mean, we're already at qe 4 -- for every, right? what do we go to, right? inifiti and beyond. sandra: peter, something else that struck me interesting in bernanke's comments, he said it was a
4:55 pm
slow solution to the debt dealing in august 2011 that got the u.s. downgraded last time. he is urging that it is very, very important that we act. i wonder if that was sort of a threat, that the markets may need to brace for a potential downgrade here? >> i mean i think the markets are worried about that, no question about it. and the fed chairman going out of his way to review recent history on this. and that downgrade we got during the fiscal tussle in 2011. the fed chairman chooses his words very carefully and clearly that was a warning. david: okay. by the way when we come back we'll check with the futures to see if there is any change in indications what might happen tomorrow, how markets might open tomorrow. peter barnes, thank you very much. sandra: you think the car show has pretty cool stuff? you saw the core rolela. i wasn't keen on the color. look at what drew a big crowd at the denver boat show. give you a hint. it is small, furry and wears
4:56 pm
skis. david: stick around for that one. >> furry? copd makes it hard to breathe,
4:57 pm
but with advair, i'm breathing better. so now i can be in the scene. advair is clinically proven to help significantly improve lung function. unlike most copd medications, advair contains both an anti-inflammatory and a long-acting bronchodilator
4:58 pm
working together to help improve your lunfunction all day. advair won't replace fast-acting inhalers for sudden symptoms and should not be used more than twice a day. people with copd taking advair may have a higher chance of pneumonia. advair may increase your risk of osteoporosis and some eye problems. tell your doctor if you have a heart condition or high blood pressure before taking advair. if you're still having difficulty breathing, ask your doctor if including advair could help improve your lung function. get your first full prescription free and save on refills at
4:59 pm
david: ben bernanke has made some news already. not only got into the hold debt ceiling limit, not only is congress not goin going to raist ceiling limit, but he thinks we should get rid


info Stream Only

Uploaded by TV Archive on